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EXHIBIT (E)(1)
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this "Agreement") is entered into as of
February 7, 2000, by and between Parker Hannifin Corporation ("A") and Xxxx'x
International, Inc. ("B").
A. A and B (each, together with its respective Affiliates, a "Party" and
collectively, the "Parties") are considering a possible transaction and in
connection therewith, are prepared to make available to each other certain
information concerning their respective businesses, financial condition,
operations, assets and liabilities.
B. A and B desire to enter into this Agreement for the purpose of setting
forth the conditions upon which the information will be made available and the
agreement of the Parties with respect to the information so disclosed.
NOW, THEREFORE, in consideration of the foregoing and the covenants
hereinafter set forth, A and B hereby agree, on behalf of themselves and their
Affiliates, as follows:
SECTION 1. Definitions.
(a) Affiliate. The term "Affiliate" shall have the same meaning as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.
(b) Disclosing Party. The term "Disclosing Party" shall mean the Party
disclosing Evaluation Material to the other Party.
(c) Evaluation Material. The term "Evaluation Material" shall mean all
information in any form, whether written or oral, previously or hereafter
conveyed or disclosed by a Disclosing Party to a Receiving Party as contemplated
hereby, and shall include all notes, analyses, compilations, studies,
interpretations and other documents prepared by the Receiving Party or its
Representatives which contain, reflect or are based upon, in whole or in part,
the information furnished to the Receiving Party or its Representatives by the
Disclosing Party or its Representatives. The term "Evaluation Material" does not
include information which (i) is or becomes generally available to the public
other than as a result of a disclosure by the Receiving Party or its
Representatives, (ii) was within the possession of the Receiving Party prior to
it being furnished to the Receiving Party by or on behalf of the Disclosing
Party pursuant hereto, provided that the source of the information was not known
by the Receiving Party to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Disclosing
Party or any other party with respect to the information or (iii) becomes
available to the Receiving Party on a non-confidential basis from a source other
than the Disclosing Party or any of its Representatives, provided that the
source was not known by the Receiving Party to be bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the Disclosing Party or any other party with respect to the
information.
(d) Highly Confidential Information. The term "Highly Confidential
Information" shall mean Evaluation Material that refers to or consists of
competitively sensitive price, promotional, marketing or product information.
(e) Receiving Party. The term "Receiving Party" shall mean the Party to
which Evaluation Material is disclosed by the Disclosing Party as contemplated
hereby.
(f) Representatives. The "Representatives" of a Party shall mean the
directors, officers, employees, agents or advisors (including, without
limitation, attorneys, accountants, consultants, bankers, lenders and financial
advisors) of that Party.
SECTION 2. Use and Disclosure of Evaluation Material.
(a) Each Party hereby agrees, as a Receiving Party, that it and its
Representatives shall use the Evaluation Material solely for the purpose of
evaluating a possible transaction with the Disclosing Party and that the
Evaluation Material will be kept confidential and that the Receiving Party and
its Representatives will
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not disclose any of the Evaluation Material in any manner whatsoever, provided,
however, that the Receiving Party (i) may disclose the Evaluation Material that
the Disclosing Party has agreed in writing may be disclosed, and (ii) the
Evaluation Material may be disclosed to the Receiving Party's Representatives
who need to know the information for the sole purpose of evaluating a possible
transaction with the Disclosing Party, who agree to keep the Evaluation Material
confidential and who are provided with a copy of this Agreement; provided
further, that Highly Confidential Information will not be disclosed without the
prior consent of both Parties and the approval of their respective outside legal
counsel, except on a need to know basis to their outside legal counsel and to
experts retained by them who agree to keep the Highly Confidential Information
confidential and who are provided with a copy of this Agreement and agree to be
bound by the terms hereof to the same extent as if they were parties hereto. In
any event, the Receiving Party shall be responsible for any breach of this
Agreement by any of its Representatives and the Receiving Party agrees, at its
sole expense, to take all reasonable measures (including, but not limited to,
court proceedings) to restrain its Representatives from prohibited or
unauthorized disclosure or use of the Evaluation Material.
(b) Each Party, as a Receiving Party, agrees that, without the prior
written consent of the Disclosing Party, neither it nor its Representatives will
(i) disclose to any other person the fact that the Evaluation Material has been
made available to it, that discussions or negotiations are taking place
concerning a possible transaction involving the Disclosing Party or any of the
terms, conditions or other facts with respect thereto (including the status
thereof), unless in the written opinion of legal counsel for the Receiving Party
the disclosure is required by law or stock exchange rule and then only with as
much prior written notice to the Disclosing Party as is practical under the
circumstances, or (ii) make any contact of any nature concerning a possible
business combination between A and B with any officer, employee, supplier,
customer, bank or other lender of or to A or B, except, as otherwise approved in
advance in writing by Xx. Xxxxxxx X. Xxxxxxxx on behalf of A and Mr. Xxxxx
Xxxxxxx or Xx. Xxxxxxx X. Xxxxxxxxx on behalf of B. The term "person" as used in
this Agreement shall be broadly interpreted to include the media and any
corporation, partnership, group, individual or other entity.
(c) In the event a Receiving Party or any of its Representatives is
requested or required (by deposition, interrogatories, requests for information
or documents in legal proceedings, subpoena, civil investigative demand or other
similar process) to disclose any of the Evaluation Material, the Receiving Party
shall provide the Disclosing Party with prompt written notice of any such
request or requirement so that the Disclosing Party may seek a protective order
or other appropriate remedy or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Disclosing Party, the Receiving Party or any of its
Representatives is nonetheless, in the written opinion of its counsel, legally
compelled to disclose Evaluation Material to any tribunal or else stand liable
for contempt or suffer other censure or penalty, the Receiving Party or its
Representative may, without liability hereunder, disclose to such tribunal only
that portion of the Evaluation Material which such counsel advises it is legally
required to disclose, provided that the Receiving Party exercises reasonable
efforts to preserve the confidentiality of the Evaluation Material, including,
without limitation, by cooperating with the Disclosing Party to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Evaluation Material by such tribunal.
SECTION 3. Return and Destruction of Evaluation Material. If either Party
decides that it does not wish to proceed with a transaction with the other
Party, the Party so deciding shall promptly inform the other Party of that
decision. In that case, or at any time upon the request of either Party for any
reason, each Party will promptly deliver to the other Party all documents (and
all copies thereof) furnished to it or its Representatives by or on behalf of
the other Party pursuant hereto. In the event of such a decision or request, all
Evaluation Material prepared by each Receiving Party or its Representatives
shall be destroyed and no copy of any Evaluation Material shall be retained.
Notwithstanding the return or destruction of the Evaluation Material, each Party
and its Representatives will continue to be bound by the obligations of
confidentiality and other obligations hereunder.
SECTION 4. No Representations or Warranties. Each Party understands and
acknowledges that neither the other Party nor any of its Representatives
(including, without limitation, its financial advisors) makes any representation
or warranty, express or implied, as to the accuracy or completeness of the
Evaluation Material.
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Each Party agrees that neither the other Party nor any of its Representatives
(including, without limitation, its financial advisors) shall have any liability
to it or to any of its Representatives relating to or resulting from the use of
the Evaluation Material. Only those representations and warranties made in a
final definitive agreement regarding the transactions contemplated hereby, when,
as and if executed, and subject to the limitations and restrictions specified
therein, will have any legal effect.
SECTION 5. Mutual Standstill Agreement.
(a) Without A's prior written consent, B will not (and B will insure that
its Affiliates will not) for a period of two years from the date of this
Agreement: (i) purchase or otherwise acquire, or offer, seek, propose or agree
to acquire, ownership (including, but not limited to, beneficial ownership as
defined in Rule 13d-3 under the Exchange Act) of any securities of A or any
direct or indirect rights or options to acquire any such securities or any
securities convertible into such securities; (ii) seek or propose, alone or in
concert with others to control or influence in any manner the management, the
Board of Directors or the policies of A; (iii) make any proposal or any
statement regarding any third party proposal, whether written or oral, to the
Board of Directors of A or any director or officer of A, or otherwise make any
public announcement or proposal whatsoever, with respect to any transaction or
proposed transaction between A or any of its security holders and B or any of
B's Affiliates, including, without limitation, any acquisition, tender or
exchange offer, merger, sale of assets or securities, or other business
combination, unless (a) A's Board of Directors or its designated representative
shall have requested in advance the submission of such proposal, (b) such
proposal is directed to A's Board of Directors or its designated
representatives, and (c) any public announcement with respect to such proposal
is approved in advance by A's Board of Directors; (iv) make a request in any
form (other than a confidential request directed to A's Board of Directors) that
the prohibitions of this Section 5 be waived or that A take any action which
would permit B to take any of the actions described in this Section 5; or (v)
enter into any discussions, negotiations, arrangements or understandings with
any person with respect to any of the foregoing.
(b) Without B's prior written consent, A will not (and A will insure that
its Affiliates will not) for a period of two years from the date of this
Agreement: (i) purchase or otherwise acquire, or offer, seek, propose or agree
to acquire, ownership (including, but not limited to, beneficial ownership as
defined in Rule 13d-3 under the Exchange Act) of any securities of B or any
direct or indirect rights or options to acquire any such securities or any
securities convertible into such securities; (ii) seek or propose, alone or in
concert with others to control or influence in any manner the management, the
Board of Directors or the policies of B; (iii) make any proposal or any
statement regarding any third party proposal, whether written or oral, to the
Board of Directors of B or any director or officer of B, or otherwise make any
public announcement or proposal whatsoever, with respect to any transaction or
proposed transaction between B or any of its security holders and A or any of
A's Affiliates, including, without limitation, any acquisition, tender or
exchange offer, merger, sale of assets or securities, or other business
combination, unless (a) B's Board of Directors or its designated representative
shall have requested in advance the submission of such proposal, (b) such
proposal is directed to B's Board of Directors or its designated
representatives, and (c) any public announcement with respect to such proposal
is approved in advance by B's Board of Directors; (iv) make a request in any
form (other than a confidential request directed to B's Board of Directors) that
the prohibitions of this Section 5 be waived or that B take any action which
would permit A to take any of the actions described in this Section 5; or (v)
enter into any discussions, negotiations, arrangements or understandings with
any person with respect to any of the foregoing.
SECTION 6. No Obligations. Each Party agrees that unless and until a final
definitive agreement regarding a transaction between the Parties has been
executed and delivered, neither Party will be under any legal obligation of any
kind whatsoever with respect to any transaction by virtue of this Agreement
except for the matters specifically agreed to herein. Each Party further
acknowledges and agrees that each Party reserves the right, in its sole
discretion, to reject any and all proposals made by the other Party or any of
its Representatives with regard to a transaction between the Parties, and to
terminate discussions and negotiations at any time.
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SECTION 7. No Waiver. It is understood and agreed that no failure or delay
by any Party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise preclude any other
or further exercise or the exercise of any other right, power or privilege
hereunder.
SECTION 8. Remedies. It is understood and agreed that money damages would
not be a sufficient remedy for any breach of this Agreement by a Party or any of
its Representatives and that the other Party shall be entitled to equitable
relief, including injunction and specific performance, as a remedy for any
breach. Those remedies shall not be deemed to be the exclusive remedies for
breach of this Agreement but shall be in addition to all other remedies
available at law or equity. In the event of litigation relating to this
Agreement, if a court of competent jurisdiction determines that a Party or any
of its Representatives has breached this Agreement, then the Party so breaching
this Agreement shall be liable and pay to the other Party the reasonable legal
fees incurred by that Party in connection with the litigation, including any
appeal therefrom.
SECTION 9. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
SECTION 10. Amendments. The provisions of this Agreement may not be
amended, modified or supplemented except by an agreement in writing signed by
both of the Parties.
SECTION 11. Successors and Assigns. This Agreement shall inure to the
benefit of the successors and assigns of the Parties.
SECTION 12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 13. Severability. In the event that any one or more of the
provisions contained in this Agreement is held invalid, illegal or
unenforceable, the validity, legality and enforceability of that provision in
every other respect and of the remaining provisions contained in this Agreement
shall not be affected or impaired thereby.
SECTION 14. Entire Agreement. This Agreement is intended by the Parties as
a complete and exclusive statement of the agreement and understanding of the
Parties in respect of the subject matter contained herein.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day
and year first written above.
XXXXXX-XXXXXXXX CORPORATION
/s/ XXXXXXX X. XXXXXXXX
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By: Xxxxxxx X. Xxxxxxxx
XXXX'X INTERNATIONAL, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
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